Edge Therapeutics, Inc.
- Company Name
- Edge Therapeutics, Inc.
- Stock Symbol
- Class Period
- December 29, 2017 to March 27, 2018
- Motion Deadline
- June 22, 2018
- District of New Jersey
The complaint charges Edge and certain of its officers with violations of the Securities Exchange Act of 1934. Edge operates as a clinical-stage biotechnology company that discovers, develops and commercializes hospital-based therapies for the management of acute, life-threatening neurological conditions. Edge’s lead product candidate is EG-1962. During the Class Period, the Company was conducting its Phase 3 NEWTON 2 study of EG-1962 for the treatment of patients with aneurysmal subarachnoid hemorrhage, or aSAH, which occurs when a brain aneurysm ruptures, causing bleeding into the compartment surrounding the brain.
The complaint alleges that throughout the Class Period, defendants misrepresented and/or concealed material information regarding the Company’s business, operations and prospects. Specifically, despite claims that Edge had “achieved meaningful progress as [it] continued to develop and [sought] to commercialize EG-1962 to address the unmet need of patients with . . . aSAH,” and that Edge was “operationally and financially well-positioned to execute [its] corporate growth strategy” by “continuing to advance EG-1962 through achievement of key additional clinical milestones,” defendants failed to disclose that EG-1962 would likely fail a futility analysis in connection with the Phase 3 NEWTON 2 study. As a result of defendants’ misrepresentations and/or omissions, the price of Edge common stock was artificially inflated to a high of $17.47 per share during the Class Period.
Then on March 28, 2018, Edge disclosed “that a pre-specified interim analysis on data from the Day 90 visit of the first 210 subjects randomized and treated in the Phase 3 NEWTON 2 study of EG-1962 demonstrated a low probability of achieving a statistically-significant difference compared to the standard of care in the study's primary endpoint, if the study is fully enrolled.” As a result, the Data Monitoring Committee (“DMC”) “recommended that the study be stopped based on its conclusion that the study has a low probability of meeting its primary endpoint.” Based on the DMC’s recommendation, Edge stated it had decided to discontinue the Phase 3 NEWTON 2 study on EG-1962. On this news, the price of Edge common stock fell $14.28 per share, or nearly 92%, to close at $1.31 per share on March 28, 2018.